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Revenue Recognition Revenue Recognition
 12 Months Ended
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]  
Revenue Recognition REVENUE RECOGNITION
The Company’s primary source of revenue is interest income generated from loans and investment securities. Interest income is recognized according to the terms of the financial instrument agreement over the life of the loan or investment security unless it is determined that the counterparty is unable to continue making interest payments. Interest income also includes prepaid interest fees from commercial customers, which approximates the interest foregone on the balance of the loan prepaid.
The Company’s additional source of income, also referred to as noninterest income, is generated from deposit related fees, interchange fees, loan fees, merchant fees, loan sales and other miscellaneous income and is largely based on contracts with customers. In these cases, the Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The Company considers a customer to be any party to which the Company will provide goods or services that are an output of the Company’s ordinary activities in exchange for consideration. There is little seasonality with regards to revenue from contracts with customers and all inter-company revenue is eliminated when the Company’s financial statements are consolidated.
Generally, the Company enters into contracts with customers that are short-term in nature where the performance obligations are fulfilled and payment is processed at the same time. Such examples include revenue related to merchant fees, interchange fees and investment services income. In addition, revenue generated from existing customer relationships such as deposit accounts are also considered short-term in nature, because the relationship may be terminated at any time and payment is processed at the time performance obligations are fulfilled. As a result, the Company does not have contract assets, contract liabilities or related receivable accounts for contracts with customers. In cases where collectability is a concern, the Company does not record revenue.
Generally, the pricing of transactions between the Company and each customer is either (i) established within a legally enforceable contract between the two parties, as is the case with the loan sales, or (ii) disclosed to the customer at a specific point in time, as is the case when a deposit account is opened or before a new loan is underwritten. Fees are usually fixed at a specific amount or as a percentage of a transaction amount. No judgment or estimates by management are required to record revenue related to these transactions and pricing is clearly identified within these contracts.
The Company primarily operates in one geographic region, Northern and Central New Jersey, metropolitan New York and contiguous areas. Therefore, all significant operating decisions are based upon analysis of the Company as one operating segment or unit.
We disaggregate our revenue from contracts with customers by contract-type and timing of revenue recognition, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Noninterest income not generated from customers during the Company’s ordinary activities primarily relates to mortgage servicing rights, gains/losses on the sale of investment securities, gains/losses on the sale of other real estate owned, gains/losses on the sale of property, plant and equipment, and income from bank owned life insurance.
The following table sets forth the components of noninterest income for the years ended December 31, 2019, 2018 and 2017:
(in thousands)
2019
 
2018
 
2017
Deposit Related Fees and Charges
 
 
 
 
 
  Debit card interchange income
$
5,719

 
$
5,150

 
$
4,474

  Overdraft charges
4,052

 
3,938

 
4,656

  ATM service charges
826

 
830

 
808

  Demand deposit fees and charges
501

 
540

 
679

  Savings service charges
107

 
126

 
123

Total
11,205

 
10,584

 
10,740

Commissions and Fees
 
 
 
 
 
  Loan fees
1,510

 
1,264

 
1,136

  Wire transfer charges
1,223

 
1,093

 
1,005

  Investment services income
1,651

 
1,314

 
1,045

  Merchant fees
813

 
784

 
718

  Commissions from sales of checks
407

 
434

 
457

  Safe deposit income
364

 
371

 
269

  Other income
250

 
264

 
202

Total
6,218

 
5,524

 
4,832

Gains on Sale of Loans
1,660

 
1,329

 
1,836

Other Income
 
 
 
 
 
  Gains on customer swap transactions
3,231

 
1,992

 
982

  Title insurance income
183

 
195

 
200

  Other income
1,463

 
295

 
518

Total
4,877

 
2,482

 
1,700

Revenue not from contracts with customers
2,836

 
2,391

 
6,327

Total Noninterest Income
$
26,796

 
$
22,310

 
$
25,435

Timing of Revenue Recognition
 
 
 
 
 
  Products and services transferred at a point in time
$
23,885

 
$
19,844

 
$
19,040

  Products and services transferred over time
75

 
75

 
68

  Revenue not from contracts with customers
2,836

 
2,391

 
6,327

Total Noninterest Income
$
26,796

 
$
22,310

 
$
25,435